How to Blow $1.2 Billion

It's been awhile since we detailed rich people who couldn't control their spending and lost a fortune, so this piece is a good catch up. It lists ten star athletes who excelled at losing millions. In all, these ten lost over $1.2 billion. Yikes!!!!

It's a pretty sad read -- full of over-spending, bad business decisions, bad personal decisions, shady managers and partners, and the like. But it does illustrate a principle that we've covered over and over again through the years: that no matter how much you make, you can spend it all (and more!)

This is why spending less than you earn is my best piece of financial advice. Because even if you make $100 million, if you spend $100 million plus $1, you're going backwards financially.

Not that making money and growing your income aren't important -- they are. But you can make all the money in the world, and if you can't control your spending, it's all for naught. That's why over-spending is #1 on my list of the ten worst financial moves anyone can make.

And don't think that over-spending is a problem just for rich athletes and celebrities. We've also seen a wide range of high-earning "average" Americans who have found that they have no problem spending more than they make.

It all boils down to self-control. If you have it, you can become wealthy even on what some would consider a modest income (here are some examples). But if you don't have it, you're doomed to financial failure even if you earn hundreds of millions of dollars.

Consider this my regular reminder of these facts. ;-)

Comments

[[email protected]]

It's too bad about Holyfield. He looked like a respectable guy, but I don't know much about his finance. I agree that spending less is more important than earning more. Anyone can be frugal if they put some effort into it, but not everyone can make millions like those athletes.

[BD]

All those examples of a "modest" income are more money than I've ever made! If I made $44,000 a year, I'd be so content. I've never made even near that much.

As for the people who blow millions of dollars...it's beyond mindboggling. It boggles my mind to know that most of the people here earn 6 figures a year, but when you get to the earning and spending proportions of athletes and actors...it just gets stupid-crazy.